Cathie Wood and her Ark Investment Management firm have sold Tesla stock in six consecutive trading sessions during the run-up to Tuesday's presidential election between former President Donald Trump and Vice President Kamala Harris. Meanwhile, Tesla Chief Executive Elon Musk has been campaigning for the Republican candidate amid discussions he could be involved in a Trump White House.
Wood has sold Tesla stock every trading day since Oct. 28 when Ark Invest unloaded more than 120,000 shares, according to the company's daily trade disclosure. Over this stretch, Wood has sold 245,153 shares, including selling 9,984 TSLA shares on Monday for $2.42 million, based on the closing price of 242.84.
As of Nov. 5, Tesla stock is the top holding in the ARK Innovation ETF with a 13.48% weight. Tesla ranks second in ARK Next Generation Internet with a weight of 8.89%. The EV company is also the top stock in ARK Autonomous Tech with weight of 13.29%.
Tesla stock advanced 3.5% to 251.44 during market trade on Tuesday after falling 2.5% to 242.84 on Monday, triggering the 7%-8% automatic sell rule.
Musk And A Trump Presidency
As Wood adjusts her Tesla holdings prior to Tuesday's election, Musk has been campaigning for Trump. Musk elevated Omead Afshar, one of his key confidants, to Tesla vice president, overseeing sales and vehicle manufacturing in North America and Europe, the Wall Street Journal reported on Monday.
Afshar, who has long worked for Musk, has been viewed internally at Tesla as a Musk proxy.
Trump in September told the New York Economic Club that, if elected, he would establish a government efficiency commission, to be headed by Musk, Reuters reported.
However, Cantor Fitzgerald Chief Executive Howard Lutnick, Trump's transition team co-chair, last week walked back Musk's potential role by a few steps. Lutnick told CNN that Musk would be "adjacent" to the White House.
"I think adjacent to it and writing software for the government and then giving the software to the government and helping the government," Fitzgerald said.
Few analysts have broached what a Musk cabinet position would mean for Tesla, as it would bring into question the chief executive's role at the company and complicate his private investments.
"Musk getting a cabinet seat in a Trump win would be a complicated decision that would take time away from Tesla and is not what shareholders want to see," Wedbush Securities analyst Dan Ives, a longtime Tesla bull, told IBD Tuesday. "He can have a role, not a cabinet position."
Musk is reportedly spending election night with Trump.
Tesla Stock Performance
TSLA shares tumbled 7.5% to 248.98 last week, dropping below a traditional buy point of 264.86 from a cup-with-handle base, according to MarketSurge charts.
However, Tesla stock is still holding the bulk of the prior week's 22% spike on earnings, but are trading around the low of 242.65 from the Oct. 24 gap-up day.
Tesla China sold 68,280 vehicles in October, including exports, a six-month low, according to China Passenger Car Association data released Monday. Local China sales were sluggish in October.
It's possible that some of Tesla's recent action reflects shifting perceptions on the presidential race, with Musk aggressively campaigning for Trump.
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Tesla stock ranks third in the 35-member IBD Auto Manufacturers industry group. The stock has an 80 Composite Rating out of a best-possible 99. Shares also have an 84 Relative Strength Rating and a 78 EPS Rating.
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